American Airline: History and Background

Date: Nov 22, 2018


American Airlines is the most significant airline company in the United States. It is characterized by wide local as well as international network operations. There are scheduled flights to major world regions such as Asia, South and North America, Caribbean and European nations. The airline route operations in central hubs such as Dallas, Chicago O’Hare and John F. Kennedy airports which are based in New York, Miami, and Chicago. The Tulsa International Airport is the airline’s central maintenance center, and Fort Worth, Texas, is its headquarters. American Airlines is a member of the Oneworld airline alliance whose main role is the coordination of services, fares and scheduling of British Airways, Japan Airlines, and other major airlines (Anderson & Leary, 1993). American Airlines has gradually progressed to become a significant airline company in the United States of America.This essay seeks to discuss its history and general background.

Early History

The American Airways was developed via either acquisitions or reorganizations of numerous small-scale airlines, which occurred in the year 1930. Initially, it was a general brand of some independent airlines. The independent carriers included Southern Air Transport and Fast Express as well as the Universal Aviation among others. In the year 1933, it commenced its operating across continents, covering approximately seventy two cities, mainly in the northeastern, southwestern, and midwestern regions of the United States. In the year 1934, the company was renamed as American Airlines after its acquisition by E. L. Cord and the subsequent appointment of C.R Smith as the company’s head manager (H?schelrath & M?ller, 2014).

Smith and Donald Douglas developed the DC-3 in the year 1936. The DC-3 was the first airline operating a route with earnings obtained solely from passenger transportation since others could not get profit without the U.S. Mail. American Airlines cooperated with Fiorello LaGuardia to construct an airport in New York owning the world’s initial airline lounge at the LaGuardia Airport termed as Admirals Club.

Post-War Period

American Export Airlines was purchased by another airline and its name was changed to American Overseas Airways in an effort to cover Europe after the World War II. I, 1950, it was sold to another company known as the Pan Am. American Airlines de Mexico S.A was started as a subsidiary to cover Mexico; also, many airports were constructed there. In the year 1962, electronic booking system was launched. American Overseas Airways was the first airline to have such a system. A terminal was build at Idlewild presently referred to as JKF Airport, New York. In the year 1970, the airline started fying through American Samoa and Nadi to Honolulu, Sydney and finally Auckland. In 1971, Trans Caribbean Airways was acquired. In March 1973, it became the first large airline to hire a female pilot. The airline has been innovative in many perspectives – the establishment of numerous major competitive developments such as the computer reservation systems, two-tier wage levels, and the frequent flyer loyalty initiatives (Lee & Geddie, 2006).

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The airline shifted to a hub-and-spoke system in the year 1981 launching its first hub in Dallas. In 1982, the second hub was established in the new Terminal 3 at O’Hare. During the late 1980s, it launched three more hubs serving the north-south traffic. In the year 1990, the airline acquired TWA’s operation assets at London Heathrow and served Heathrow until 2008 alongside United Airlines. In the 1990s, the reduced fuel costs and the favorable business environment enabled the company to get more profits (Borenstein & Rose, 2003). The pilots went on strike for better pay in February 1997. In the 1990s, the airline extended its network in Latin America becoming the largest US carrier. It became the first airline to provide e-ticketing in the 44 nations it covered. It founded Oneworld alliance alongside British Airways, Canadian airlines, Cathay Pacific, and Qantas.


The Airline lost money in the economic downturn, which followed the attacks experienced in September, 2001 whereby two planed were damaged (Borenstein & Rose, 2003). However, the airline extended into new markets such as India, China and Ireland. In 2005, it announced quarterly profits of $58 million for the first time after 17 quarters. Airline terminated its maintenance center in Kansas City in September, 2010. It played a vital role in the reconstruction of the Japan Airlines in 2009 to 2011. In February, 2010 the airline strengthened links with Japan Airline and Oneworld. The joint began in 2011.

The Airline initiated a partnership with other airlines including the Iberia and British Airways. The venture received approval in July 2010. Another collaboration commenced with JetBlue Airways, which covered centers that initially were not serviced by the airline in 2010. In the same year, there was market growth in the Asian market. In the year 2011, the airline covered Los Angeles and Shanghai. In 2013, the company initiated flights in Dallas and Seoul. The latest coverage is from Dallas to Shanghai and Hong Kong, which was commenced in summer 2014. The airline has been first ever to have a direct flight between Dallas and China (H?schelrath & M?ller, 2014).

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The American Airlines group has made a great progress from the time of its creation in 1930 including several mergers with other companies. There are great future prospects for this ever-expanding company. The airline has successfully operated in the international and domestic network. It focuses on expanding to other unexplored and already existing markets. For such an incredibly expanding airline, there is much more positive outcome to be expected.

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